December 1st, 2020 by Zachary Shahan
As Tesla’s market cap has climbed through the roof, and then some clouds, and then the stratosphere, and then the exosphere, and then bumped its head on the moon, many have wondered if Tesla might one day buy a legacy automaker or two.
Right now, Tesla [NASDAQ: TSLA] market cap is above $554 billion, while the second most valuable automaker, Toyota [NYSE: TM], is worth a bit more than $222 billion, Ford [NYSE: F] is worth a bit more than $36 billion, GM [NYSE: GM] is worth almost $64 billion, and Fiat Chrysler Automobiles [NYSE: FCAU] is worth almost $16 billion. In other words, those four automakers combined are worth approximately 61% of Tesla on the stock market*.
The stock market isn’t the real world, but there’s no denying that real money is being passed around based on what people think about the future of publicly traded companies — and based on what they think others think about the future of publicly traded companies. Even if you think that Tesla’s stock price is a bit inflated, the gap between it and every other automaker is ginormous. Tesla is surfing the biggest wave in history headed into the EV revolution, while many (or all) legacy automakers are struggling to basically replace several key organs without dying in the process. So, it has tickled many people’s brain cells to think about the possibility of Tesla buying up some legacy auto brands at some point.
As we noted the other day, Tesla CEO Elon Musk was just awarded the 2020 Axel Springer Award. He was in Berlin today to receive the award. In an interview with Axel Springer CEO Mathias Döpfner, Musk was asked about this possibility.
“Well, I think we’re definitely not going to launch a hostile takeover,” he said. “So, I suppose if there was a friendly one, if somebody said, ‘Hey, we think it would be a good idea to merge with Tesla,’ we certainly could have that conversation. But, you know, we don’t want it to be a hostile takeover sort of situation.”
What do you think? Would any legacy automakers go to Tesla and inquire about an acquisition? If so, which companies?
*As a final note, keep in mind that Tesla is much more than an auto company at this point. It is a battery producer, potentially battery miner, AI developer, infotainment company, leading charging station developer and operator, nascent auto insurance company, etc. For more on this matter, see: Tesla As 17 Different Companies.
Featured image courtesy Tesla
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